Big stakes buying and selling

Among Recycling Today staff members, it can become readily apparent when merger and acquisition (M&A) activity is about to increase in one or more of the major recycling sectors.

The early warning system consists of an increase in the number of phone calls and emails to Recycling Today from researchers and analysts (or more commonly interns and new hires managed by them) who are affiliated with investment banks and legal firms.

As these individuals conduct their research into potential transactions, they are likely to come across articles and lists published in Recycling Today and will contact us to find out what additional scrap or recycling knowledge we might be willing to share.

It is perhaps an oversimplification to state this, but increased M&A activity in the recycling sector most often is attached to an overheated or hot market or, contrarily, to a market in a long-term trough that is taking its toll on balance sheets.

Independent-minded recyclers may not be enthused about selling their companies in either circumstance. In a prosperous market, no one wants to miss out on one of those years that can yield a premium payoff. In a down market, a business owner with no other options is unlikely to be satisfied by “selling low” because there is no other alternative.

Even more so than many other business owners, family-run recycling firms pride themselves on their ability to “buy low and sell high” when it comes to big decisions; however, a sustained dismal market can force the hands of even the savviest recyclers.

In our coverage of the metals recycling and the waste hauling and recycling sectors, our media group tries to present the perspective of both the industry’s largest firms as well as its startups and independent companies.

Reporting on M&A activity often draws these Davids, Goliaths and everything in between into the coverage, as companies large and small attempt to craft transactions that demonstrate they’ve done the best they can for their shareholders or employees. Even so, every deal is likely to cause disruptions to any number of careers and lives, in this case affecting people who may well read our magazines and e-newsletters.

In the first half of 2016, www.RecyclingToday.com and this magazine’s pages have carried a stream of M&A-related news items. Based on the early warning system, that seems unlikely to change during the rest of the year.